DrunkenDragon713

I'm just wondering, if the car is around 28k, would a 4-6k downpayment be enough to not have the interest kill you.

I want to get a bank loan, b/c the loans from car lots are just stupid for anyone under 25. I'm shooting for under 9% interest, but as long as it's not 11 or over, I'm happy.

Lirathal

*GAG*

9%? Holy Crap

7.1% is high, 5.9% is average in my neck of the woods



Nathan

GhostTX

Just gonna have to wait to see what the market is when I buy.

Never hurts to have 2-3 bank loan quotes from banks though. Finance guys at the dealers usually want you to go through their banks, so you might can get a rate lower than whatever bank rate quotes you have as they try to beat them.

Grantsdale

FM Credit is usually not too too bad, provided you have a decent credit rating. I will be paying all but $1000 cash. The $1000 I will take the full term to pay off to build credit. Interest will add up to basically nothing, so in effect I'm screwing the credit company to get myself a better credit rating.

JeffreyDJ

Ford Credit is usually very competitive, and I've always had great service from them.

f1-cobra

Credit Unions around here have 3.5% to 4% for 5 year loans on new cars.

My05Stang

Doesn't interest depend alot on what your credit score is...?
If you have a good credit score you get a low rate and you get high rate if your score is bad.....

JeffreyDJ

That is a large part of it, yes. However, in many cases a poor score can still get a better rate through the branded credit (like Ford Motor Credit) then through a bank or CU who'll be more strict.

But, yes, credit scrore can play a LARGE part in what rate you'll get. But, if the guys credit isn't too bad, and he pays 11% -- only crack can explain that!

VillianousBlak

Keep in mind the more you put down the less there will be to charge interest on.

JZInternet

That is a great idea but do you get as much credit as you would by finacing say... 20k? It's not worth it for me to pay that much in finacing for 20k for some extra credit, but I like your idea. B)

JeffreyDJ

A better idea is to finance as much as they will let you. Pay a few payments, then pay it off. You won't pay much interest that way, and it'll show a 20K+ loan paid in full, as opposed to a low dollar loan paid out over 5 years.

A higher dollar loan paid in full (or even stretched over the course of a year) is a better idea if you're really trying to establish credit.

And, it's not really screwing the credior if you only get a 1000K loan and pay it back over 2,3-5 years. No biggie to them, it's still making money.

A better deal is the 0.0% interest loan on my Mach 1 right now. They give me lots of money, and I pay back EXATLY what I borrowed - no interest!

matic

Just make sure you go through a bank or credit union. I would not recommend the Ford Credit, not because they aren't good, but because you're going to pay more. Anytime you finance through the dealer, you're going to get front-loaded on the interest. That way, even if you pay off the loan in six months, you've paid every penny of interest you would have over the full term of the loan. You won't do that with a loan from a financial institution. This is how they were still able to make money on "0% financing" ... it wasn't really

JeffreyDJ

Uh, huh? That isn't remotely true.

Yeah, it's really 0.0% financing. I can tell you if you divide the end price of my car that I "financed" by 60 that's my payment ... For instance, on a 10K loan, you're payment would be $166.67.

An FMC loan is exactly the same as a CU loan. If you pay it off early, that's all you'll pay. You don't have any front loaded interest. That's the way home loans work, not car loans. Come on now, at least try and spout something close to facts.

The interest (if any) is spread evenly over the course of the loan. If you pay your car off two years early, you'll have only paid the interest due for those 3 previous years (assuming a 60 month term).

If you have any sort of written proof you can link or scan , that'd be real nice.

stoic21

Someone gets a √-

There is no reason not to go through fomoco if you get the rate you want. Just know what to ask for.

Two main types of loans

78's Loan- The first payment you make on the car is 78% interest and 22% towards the loan. This loan is not what most people want because you can't really refinance since most of your interest is paid in the firsts 2.5 years on a 5 year loan.
But sometimes you can get a better rate by doing this type of loan. just stick out the entire time of the loan and don't try to pay it off early or refi.

The other type of loan takes the entire cost of the loan, adds interest, and then divides it evenly over the course of the loan. This is the best way to go if you want to pay off the car early of refi. And usually as of lately you can get the same rate using this type of loan as you could get on a 78's loan.

Bottom line. just make sure you get the type of loan you want, and the rate you want and you will be fine. :flag2:

matic

It's all part of the game dealers like to play. Maybe your experience is different, maybe I should have qualified with "Your mileage may vary" but I've never met a dealer who didn't want to finance me with the interest up front. They don't like to tell you that of course. Some use the 78 loan that Stoic mentioned, but I have personally watched GMAC run three people a loan where the only thing they were paying for the first several payments was the interest, the principle didn't get touched until almost a year later. (friend of mine was the salesman)
If you're well armed when you negotiate, of course you'll get a better deal, but I find it far easier to deal with my credit union, they don't even try that crap. Plus, I can get 3.9% with them

*shrug* That's been my experience. If you go in with your own approved financing, they can't play numbers with payments vs. trade in vs. sticker. It is, of course, just my opinion.

stoic21

Definately go with what works for you. Just ask how whatever finance option they give you breaks down. find out how much interest is in each payment. The one thing i can say is that FoMoCo will not EVER tell you that you are going to get 0% interst and charge you a bunch of interest up front. they have to disclose interest rate when the papers are signed. If for some reason they can't get the predetermined rate, they call you back in to renegotiate. But as a side not just tell them to GFTS and there isn't really much they'll do because they usually do not want the car back. They can normally find a way around it because they estimate based on your credit and money what you will qualify for, so it usually isn't off my much. :flag2:

Grantsdale

As far as I know (and the info I got is for someone who used to work high up setting up credit financing in a couple super-major companies) the company doesn't get to see the size of the loan, just if it is paid off, and if payments are missed.

It could be different for car loans, these are general financing loans I'm talking about, and if it is different, thank you.

cyoda44

Any high $$ loan needs to show at least 18 months of payment history to be the most helpfull in raising your credit score. In short ... the more you owe and the longer you pay interest.... the better your score will be. remember also that everytime your credit gets pulled it will lower your score 7 to 10 points. You can start out at dealer #1 with a score of 650 and be down to 600 before you get the right car at dealer #5.

JeffreyDJ

As far as I know (and the info I got is for someone who used to work high up setting up credit financing in a couple super-major companies) the company doesn't get to see the size of the loan, just if it is paid off, and if payments are missed.

It could be different for car loans, these are general financing loans I'm talking about, and if it is different, thank you. [/b][/quote]
I worked at Experian/TWO for for 5 years. Order your credit report and you'll see that indeed the full amount of the original loan is there, as well as your monthly payment, and the balance.

This is true for Home Loans, Regular Loans, Car Loans, Credit Card Balances, etc.

A credit score is a complicated thing. They look at payment history debt/income ratio, and even how much of your debt is revolving credit as opposed to a fixed loan type repayment!

Believe me, a larger loan paid off looks much better then a small loan paid off over 5 years.

An example report is below (in PDF format):

http://www.experian.com/credit_report_basi...editreport1.pdf

Hope that helps clear it up for you.

JeffreyDJ

This isn't wrong, I'm just expounding. Any credit inquiry (i.e. applying for credit cards, etc.) can lower your rating to an extent. Also, it depends on the company pulling credit how much it lowers it.

For instance, when buying a car they *MAY* ignore inquiries if it is obvious your shopping to compare rates, but this is only when human intervention is involved in the final decision. If its a computer with no override, your outta luck.